Rodrigo, Jr. vs. Sandiganbayan

The pendency of a protest or opposition to a COA notice of disallowance does not bar the Provincial Auditor from filing a criminal complaint with the Ombudsman, and the Sandiganbayan has original jurisdiction over a municipal mayor charged with violating Section 3(e) of R.A. No. 3019 because the position of Municipal Mayor is classified as Salary Grade 27 under R.A. No. 6758, regardless of the actual salary received.

Petitioners Conrado B. Rodrigo, Reynaldo G. Mejica, and Alejandro A. Facundo were, respectively, the Mayor, Municipal Planning and Development Coordinator, and former Municipal Treasurer of San Nicolas, Pangasinan. The Municipality of San Nicolas had contracted with Philwood Construction for the electrification of Barangay Caboloan. The dispute implicated the State Audit Code and COA circulars governing disallowance and criminal referral, the Anti-Graft and Corrupt Practices Act, and the Sandiganbayan jurisdiction provisions of P.D. No. 1606 as amended by R.A. No. 7975, which limit the anti-graft court's original jurisdiction to officials occupying Salary Grade 27 and higher.

On 25 June 1992, the Municipality of San Nicolas, Pangasinan, represented by Mayor Conrado B. Rodrigo, entered into an agreement with Philwood Construction, represented by Larry Lu, for the electrification of Barangay Caboloan, San Nicolas, for the sum of P486,386.18. The project required the installation of two units of diesel power generator (20 KVA, 220 W, battery start and other accessories); 24 rolls of feeder lines with nos. 6, 8, and ten wires; 40 units of 4 x 4 wooden posts with accessories; and the construction of a powerhouse with concrete foundation and double throw safety switches (double pole, 250 amperes capacity of 220 V with fuse).

On 2 September 1992, Reynaldo G. Mejica, the Municipal Planning and Development Coordinator, prepared an Accomplishment Report stating that the Caboloan Power Generation project was 97.5% accomplished. The report was supposedly approved by Mayor Rodrigo and confirmed by Larry Lu. On the basis of that report, Alejandro A. Facundo, the Municipal Treasurer, effected payment of P452,825.53 to Philwood Construction.

On 14 August 1993, petitioners received a Notice of Disallowance dated 21 June 1993 from the Provincial Auditor of Pangasinan, Atty. Agustin Chan, Jr. The Provincial Auditor found that, based on COA evaluation of the electrification project, only 60.0171% of the project, equivalent to P291,915.07, was actually accomplished. Of the two generator units supposedly purchased, only one second-hand unit was delivered, and that generator broke down after only two nights of operation. Instead of 40 wooden posts, only 27 were installed, and the powerhouse was only 65.635% completed. The Provincial Auditor disallowed P160,910.46.

In September 1993, petitioners requested the Provincial Auditor to lift the notice of disallowance and to re-inspect the project. They reiterated the plea in a letter dated 3 November 1993, attaching a Certificate of Acceptance and Completion signed by Clemente Arquero, Jr., Barangay Captain of Caboloan, and Eusebio Doton, President of the Cabaloan Electric Cooperative. The Provincial Auditor allegedly did not act on petitioners' requests.

On 10 January 1994, the Provincial Auditor filed a criminal complaint for estafa before the Ombudsman against petitioners. Also impleaded were Larry Lu and Ramil Ang, President and General Manager, and Project Engineer, respectively, of Philwood Construction. On 10 June 1995, Acting Ombudsman Francisco Villa approved the filing of an information against petitioners for violation of Section 3(e) of Republic Act No. 3019 before the Sandiganbayan.

• Due Process and Pending Disallowance: Petitioners contended that the Provincial Auditor's institution of the criminal complaint despite the pendency of their opposition to the notice of disallowance violated their right to due process; they invoked Section 44.6.4 of the State Audit Manual, which they read as requiring the auditor to evaluate the written explanation for lifting or settling a suspension or extending the time to answer before conversion into a disallowance.
• Absence of Elements and Conspiracy: Petitioners argued that their opposition to the disallowance, supported by a Certificate of Acceptance and Completion, negated the elements of evident bad faith or negligence and damage, and that the evidence did not establish conspiracy among them.
• Sandiganbayan Jurisdiction: Petitioners maintained that the Sandiganbayan had no jurisdiction over them because Mayor Rodrigo occupied a Grade 24 position, receiving a monthly salary of P10,441.00, which they claimed was equivalent to the fourth step increment in Grade 24 under R.A. No. 6758.
• Grave Abuse and Due Process in Preliminary Investigation: Petitioners alleged that the proceedings before the Sandiganbayan violated the Due Process Clause because they were preceded by a hasty, malicious, and sham preliminary investigation, exposing them to prolonged anxiety, aggravation, expenses, and humiliation of a public trial.
• Suspension Pendente Lite and Impartial Tribunal: Petitioners alleged that the precipitate Sandiganbayan order of suspension was a legal error and showed a lack of the required cold neutrality of an impartial tribunal, violating their constitutional rights under the Due Process Clause and the Bill of Rights.

• Duty to Institute Criminal Action: Respondents invoked Sections 55 and 56 of Commission on Audit Circular No. 85-156-B, which require the Provincial Auditor to report fraud or unlawful activities and to file a letter-complaint with the Tanodbayan or Ombudsman when criminal prosecution is warranted.

• Due Process and Pending Disallowance: Whether the filing of a criminal complaint by the Provincial Auditor with the Ombudsman while petitioners' opposition to the notice of disallowance remained pending violated petitioners' right to due process.
• Grave Abuse of Discretion: Whether the Ombudsman committed grave abuse of discretion in filing the information against petitioners.
• Sandiganbayan Jurisdiction: Whether the Sandiganbayan had jurisdiction over petitioners, particularly Mayor Rodrigo, given the claim that he occupied a Grade 24 position at the time of the alleged offense.
• Suspension Pendente Lite and Impartial Tribunal: Whether the Sandiganbayan's order suspending petitioners pendente lite and its proceedings violated due process and the Bill of Rights for lack of cold neutrality of an impartial tribunal.

• Due Process and Pending Disallowance: No. The Provincial Auditor may file the criminal complaint once sufficient grounds exist; he need not first resolve the opposition to the notice of disallowance, and due process is satisfied by the opportunity to confront the accusations in the preliminary investigation.
• Grave Abuse of Discretion: No. The Ombudsman's probable-cause determination is entitled to non-interference absent grave abuse; the elements of the offense and conspiracy are evidentiary matters for trial, and petitioners failed to show abuse.
• Sandiganbayan Jurisdiction: Yes. The Municipal Mayor is classified as Salary Grade 27 under R.A. No. 6758; actual salary may be lower due to the local government unit's class and financial capability but does not affect the Grade, so Section 4(a) of P.D. No. 1606 as amended by R.A. No. 7975 confers jurisdiction, including over the co-accused.
• Suspension Pendente Lite and Impartial Tribunal: No. These grounds are subsumed under the due-process challenge and fail because no violation or grave abuse was established; the petition is devoid of merit.

• Due Process and Pending Disallowance: Petitioners' reliance on Section 44.6.4 of the State Audit Manual was misplaced. That provision concerns a suspension, not a disallowance, and the written explanation it mentions is for lifting a suspension or extending the time to answer before conversion into a disallowance, not for contesting a disallowance. Under Section 82 of the State Audit Code, a suspension not satisfactorily explained within ninety days becomes a disallowance unless the Commission or auditor extends the time for good cause shown. Respondents correctly invoked Sections 55 and 56 of COA Circular No. 85-156-B, which impose on the Provincial Auditor the duty to report fraud or unlawful activities and to file a letter-complaint with the Tanodbayan or Ombudsman when criminal prosecution is warranted. The Provincial Auditor need not resolve the opposition to the notice of disallowance and the motion for re-inspection before instituting the complaint so long as there are sufficient grounds. The criminal aspect of due process is not impaired because petitioners may confront the accusations during the preliminary investigation and raise their defenses there. If the Provincial Auditor, COA, or this Court later absolves them, the prosecuting officer may take cognizance of that decision and accord it proper weight. Exoneration in the audit investigation does not automatically dismiss the criminal complaint because the preliminary investigation is independent from the COA investigation; the first determines the fact of the commission of a crime, while the second relates to the administrative aspect of the expenditure of public funds. Thus, the Ombudsman did not err in entertaining the complaint, and the Sandiganbayan did not err in allowing trial to proceed despite the pendency of petitioners' motions before the auditor.
• Grave Abuse of Discretion: The presence or absence of the elements of the crime is evidentiary in nature and is a matter of defense that can best be passed upon after a full-blown trial on the merits. The same applies to the alleged absence of conspiracy between the accused. The Supreme Court has maintained a consistent policy of non-interference in the Ombudsman's determination of probable cause, provided there is no grave abuse of discretion. Quoting Young vs. Office of the Ombudsman, the Court explained that the rule rests on respect for the investigatory and prosecutory powers granted by the Constitution to the Office of the Ombudsman and on practicality, lest the courts be swamped by innumerable petitions assailing the Ombudsman's investigatory proceedings. Petitioners failed to establish any such abuse on the part of the Ombudsman.
• Sandiganbayan Jurisdiction: Before R.A. No. 7975, Section 4 of P.D. No. 1606, as amended by P.D. No. 1861, gave the Sandiganbayan exclusive original jurisdiction over violations of R.A. No. 3019 and other offenses committed by public officers in relation to their office where the prescribed penalty was higher than prision correccional, imprisonment for six years, or a fine of P6,000.00. R.A. No. 7975 redefined that jurisdiction. As amended, Section 4(a) of P.D. No. 1606 grants original jurisdiction over violations of R.A. No. 3019 where one or more of the principal accused are officials occupying positions of regional director and higher, otherwise classified as Grade 27 and higher under R.A. No. 6758, and includes a catchall for all other national and local officials classified as Grade 27 and higher. People vs. Magallanes explained that the amendments eased the Sandiganbayan's docket and allowed it to focus on higher-ranking officials, with Grade 27 as the demarcation between those within the Sandiganbayan and those within the regular courts. Although the position of Municipal Mayor is not named in Section 4(a)(1) to (4), the catchall in Section 4(a)(5) covers it. The 1997 and 1989 editions of the DBM's Index of Occupational Services, Position Titles and Salary Grades list the position of Municipal Mayor I under Salary Grade 27. Petitioners' claim that Mayor Rodrigo occupied Grade 24 because he received P10,441.00 monthly was a simplistic and incorrect interpretation. Under Article IX-C, Section 5 of the 1987 Constitution and R.A. No. 6758, compensation is standardized by taking into account the nature of responsibilities and qualifications required for the position. The Grade groups positions sufficiently equivalent as to level of difficulty, responsibilities, and qualification requirements into one range of basic compensation. Sections 10 and 19(b) of R.A. No. 6758 allow local government units to pay rates based on their class and financial capability, so an official's actual salary may be less than the salary schedule. That circumstance, however, has no bearing on the official's Grade. Mayor Rodrigo's position was classified as Grade 27, and because he was charged with violation of Section 3(e) of R.A. No. 3019, he was subject to the Sandiganbayan's jurisdiction under Section 4(a) of P.D. No. 1606 as amended by Section 2 of R.A. No. 7975. By virtue of the same provision, his co-accused were also subject to the Anti-Graft Court's jurisdiction.
• Suspension Pendente Lite and Impartial Tribunal: The third and fourth grounds raised by petitioners were related to the first ground and were subsumed thereunder. Because no due process violation or grave abuse of discretion was established, the challenge to the suspension order and the claim of lack of cold neutrality of an impartial tribunal also failed. The petition was devoid of merit.

• Provincial Auditor's Duty to Institute Criminal Action — Under Sections 55 and 56 of COA Circular No. 85-156-B, if after audit evaluation the auditor is convinced that the evidence sufficiently discloses fraud or other unlawful activities and identifies the perpetrators, he must report the matter and, if criminal prosecution is warranted, prepare a letter-complaint and file it with the Tanodbayan or Ombudsman within ten days. The pendency of an opposition to a notice of disallowance and a motion for re-inspection does not suspend this duty so long as sufficient grounds exist. The Court applied this to hold that the Provincial Auditor properly filed the complaint despite petitioners' pending protest.
• Independence of Preliminary Investigation from COA Audit — A COA audit investigation and a criminal preliminary investigation are distinct. The first relates to the administrative aspect of the expenditure of public funds; the second determines the fact of the commission of a crime. Exoneration in the audit investigation does not automatically dismiss the criminal complaint, although the prosecuting officer may accord a later decision of the auditor, COA, or Court its proper weight. The Court applied this to uphold the Ombudsman's entertainment of the complaint.
• Non-Interference in Ombudsman's Probable Cause Determination — Courts generally do not interfere with the Ombudsman's determination of probable cause absent grave abuse of discretion. The presence or absence of the elements of the crime and the existence of conspiracy are evidentiary matters and defenses that are best resolved after a full-blown trial. The Court applied this to reject petitioners' claim that the Ombudsman gravely abused its discretion.
• Salary Grade vs. Actual Salary — Under R.A. No. 6758, an official's Grade is determined by the nature of the position—its level of difficulty, responsibilities, and qualification requirements—not by the actual salary received. Local government units may pay less than the salary schedule depending on their class and financial capability, but actual salary does not change the Grade. The Court applied this to hold that Municipal Mayor I is Salary Grade 27 and that Mayor Rodrigo remained within the Sandiganbayan's jurisdiction despite his claimed Grade 24 salary.
• Sandiganbayan Jurisdiction over Grade 27 Officials — Under Section 4(a) of P.D. No. 1606 as amended by R.A. No. 7975, the Sandiganbayan has original jurisdiction over violations of R.A. No. 3019 where one or more of the principal accused occupy positions classified as Grade 27 or higher, including the catchall for all other national and local officials classified as Grade 27 and higher. Co-accused are also subject to the Anti-Graft Court's jurisdiction under the same provision. The Court applied this to the municipal mayor and his co-accused.
• Disallowance vs. Suspension — A disallowance is the disapproval of a credit or account due to non-compliance with law or regulations, while a suspension is the deferment of action pending compliance with certain requirements. A suspension becomes a disallowance if not satisfactorily explained within ninety days unless the time is extended for good cause. Section 44.6.4 of the State Audit Manual applies to suspensions, not to disallowances. The Court applied this to reject petitioners' due-process argument.

• "The Provincial Auditor need not resolve the opposition to the notice of disallowance and the motion for re-inspection pending in his office before he institutes such complaint so long as there are sufficient grounds to support the same." — This states the ratio on why the pending disallowance protest did not bar the criminal complaint or violate due process.
• "The preliminary investigation, after all, is independent from the investigation conducted by the COA, their purposes distinct from each other." — This defines the independence of the criminal preliminary investigation from the COA audit and supports the rule that audit exoneration does not automatically dismiss the criminal complaint.
• "The presence or absence of the elements of the crime, however, is evidentiary in nature and is a matter of defense, the truth of which can be best passed upon after a full-blown trial on the merits." — This is the Court's justification for non-interference in the Ombudsman's probable-cause determination and for treating petitioners' defenses as trial matters.
• "This circumstance, however, has no bearing on such official's Grade." — This encapsulates the Court's holding that a local government official's actual salary may be lower than the salary schedule without changing the Salary Grade that determines Sandiganbayan jurisdiction.

• People vs. Magallanes, 249 SCRA 212 (1995) — Explained the effects of R.A. No. 7975 on the Sandiganbayan's jurisdiction; followed to hold that Grade 27 is the demarcation and that the Municipal Mayor falls within the Anti-Graft Court's original jurisdiction.
• Young vs. Office of the Ombudsman, 228 SCRA 718 (1995) — Quoted for the rationale behind the policy of non-interference in the Ombudsman's determination of probable cause; followed in rejecting petitioners' grave-abuse claim.
• Annie Tan vs. Office of the Ombudsman, G.R. Nos. 114332 & 114895, September 10, 1998 — Cited as a recent decision reiterating the Young vs. Office of the Ombudsman rationale on non-interference with the Ombudsman's investigatory and prosecutory powers.
• Olivarez vs. Sandiganbayan, 248 SCRA 700 (1995) and Ocampo III vs. Sandiganbayan, 236 SCRA 1 (1994) — Cited for the rule that the presence or absence of the elements of the crime is evidentiary and a matter of defense to be resolved after trial.
• Ramos vs. Aquino, 39 SCRA 585 (1971) — Cited in support of the distinction between the COA audit investigation and the criminal preliminary investigation.

• Section 3(e), Republic Act No. 3019 — The Anti-Graft and Corrupt Practices Act provision under which petitioners were charged; it prohibits causing undue injury to any party, including the government, through evident bad faith or gross negligence. The information against petitioners was for violation of this provision.
• Sections 55 and 56, Commission on Audit Circular No. 85-156-B — Require the auditor to report fraud or unlawful activities and to file a letter-complaint with the Tanodbayan or Ombudsman when criminal prosecution is warranted. The Court applied these provisions to hold that the Provincial Auditor had the duty to file the complaint despite the pending disallowance protest.
• Section 44.6.4, State Audit Manual — Concerns the auditor's responsibility to evaluate a written explanation for lifting a suspension or extending the time to answer before conversion into a disallowance. The Court held it inapplicable because petitioners were charged with a disallowance, not a suspension.
• Section 82, State Audit Code (Presidential Decree No. 1445) — Provides that a charge of suspension not satisfactorily explained within ninety days after receipt or notice becomes a disallowance unless the Commission or auditor extends the time for good cause shown. The Court used it to distinguish suspension from disallowance.
• Section 4, Presidential Decree No. 1606, as amended by Presidential Decree No. 1861 and Republic Act No. 7975 — Defines the Sandiganbayan's jurisdiction. As amended by R.A. No. 7975, it grants original jurisdiction over violations of R.A. No. 3019 where one or more principal accused occupy positions classified as Grade 27 or higher, including the catchall for all other national and local officials classified as Grade 27 and higher. The Court applied it to the Municipal Mayor and his co-accused.
• Sections 2, 7, 8, 9, 10, and 19(b), Republic Act No. 6758 — The Compensation and Position Classification Act of 1989. These provisions establish the policy of equal pay for substantially equal work, the salary schedule, the DBM's authority to prepare the Index of Occupational Services, and the rule that local government units may pay rates based on their class and financial capability. The Court applied them to hold that actual salary does not determine Salary Grade.
• Article IX-C, Section 5, 1987 Constitution — Requires Congress to provide for the standardization of compensation of government officials and employees, taking into account the nature of the responsibilities pertaining to, and the qualifications required for, their positions. The Court cited it as the constitutional basis for R.A. No. 6758.
• Rule 65 — The procedural rule under which petitioners filed their petition for certiorari before the Supreme Court.

Chief Justice Davide, Jr., and Justices Melo and Pardo concurred.